Page 6 - EurOil Week 04 2023

EurOil COMMENTARY EurOil

Italy taps North Africa for more

energy supply

Italy is seeking extra North African gas to replace lost Russian volumes.

ITALY LEADING Italian politicians are in talks in Meloni said that while Draghi had made
North Africa this week with the hope of secur- progress in procuring extra energy for Italy,
WHAT: ing extra energy supply to help ease Italy’s crisis. his efforts had not gone far enough. In terms of
Italian politicians were in Italian Prime Minister Giorgia Meloni went energy security, Italy should emerge from the
North Africa this week. to Algiers on January 22 for discussions with current crisis “stronger and more autonomous
Algerian counterpart Aïmene Benabderrah- than before.”
WHY: mane and also met with President Abdelmadjid Meanwhile, Italian Foreign Minister Anto-
Energy took centre stage Tebboune on January 3. nio Tajani was in Cairo this week, where he met
in the talks. Meloni’s predecessor Mario Draghi likewise with Egyptian President Abdel Fattah el-Sisi on
visited Algeria in July 2022, intending to clinch January 22. The pair discussed “energy secu-
WHAT NEXT: new energy deals, including one to increase gas rity, economic co-operation and stability in the
Italy is set to boost supplies to Italy by 4bn cubic metres per year. Mediterranean, especially in Libya.”
Algerian gas flow, while Algeria has become Italy’s source of energy sup- Descalzi had also paid a visit to el-Sisis on
Spain has lost much of its plies since the latter lost a significant portion of January 16, where Eni officials discussed their
supply. its Russian gas. Italy relies on gas heavily in the plan for the energy transition and decarbonisa-
power sector and in industry. tion work in Egypt. A memorandum of intent
Accompanying Meloni was Eni CEO Clau- (MoI) was signed on cutting emissions, par-
dio Descalzi, who stressed that Italy’s gas supply ticularly by eliminating flaring.
security would be ensured next winter as long Russia was the main supplier of gas to Italy
as extra shipments could be sourced from Alge- in 2021, delivering more than 29 bcm. In com-
ria. Eni announced on January 23 that two more parison, Algeria sent only 22 bcm. But the sit-
agreements had been reached with Algeria’s uation has since changed radically. Russian gas
state-owned Sonatrach on energy supplies and now accounts for only 10% of Italian imports,
decarbonisation, but there were no specific deals versus a pre-war level of 40%.
on oil and gas volumes. In the meantime, Algerian gas flow to Italy
The two companies agreed to look at ways of was up 41% year on year in the third quarter
reducing emissions, generating more renewable of 2022, according to EU data. The North Afri-
energy and producing green hydrogen, and to can country’s overall deliveries to the EU rose
assess options for developing carbon capture by 4%.
technology. They will also study “possible meas- While Italy has ramped up shipments from
ures to improve Algeria’s energy export capacity Algeria, the latter’s supplies to Spain were down
to Europe.” 36% y/y in Q3 2022, owing to the shutdown of
The agreements demonstrate “our commit- the Gazoduc Maghreb Europe (GME) pipeline
ment to ensuring Italy’s security of supply while that runs through Morocco. Algeria had been
at the same time pursuing our decarbonisation Spain’s second-biggest supplier, but it cut sup-
objectives,” Descalzi said. “The partnership ply via GME after the government in Madrid
between Italy and Algeria gets stronger today, backed the position of Morocco on the disputed
and Algeria’s key role as one of Europe’s main West Sahara region. But that has left greater
energy suppliers is confirmed.” amounts of gas available for Italy. ™

P6 www. NEWSBASE .com Week 04 26•January•2023